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By Manny Avedissian
Dear Website Owner,
If you have an existing website or domain name you no longer need and wish to
sell it to an interested buyer for a one-time profit, or if you’re a
speculator looking to build a steady source of revenue by buying and
reselling valuable domain names, this helpful guide will explain the steps
you need to take to ensure a quick,easy,profitable sale.
Step 1 – Establish a Reasonable Price for Your Site
How Much Can I Get?
Before you sell, it`s a good idea to know how much the domain is worth. Market
prices for domain names can run from a few dollars to thousands of dollars
for premium names. The domain name "Loans.com (http://Loans.com)", for
example, sold for $3,000,000 just a few years ago. The key to deciding
whether or not to sell a domain name you own is to determine its worth to you
if kept and, alternatively, how much a buyer is willing to pay. You may have
heard ‘rags to riches’ type stories of cheap domain names resold
for hundreds of thousands of dollars. During the good old days of the
Internet boom this was possible. However, things have slowed down
considerably since then and there it is very rare to hear of a domain name
sold for more than $10,000. However, while big deal domain sales do occur
less often in today’s domain market, selling domain names can still be
very profitable. Short, catchy, top level domain names are selling for
upwards of $5,000 on the domain aftermarket. Other longer, but still usable,
names may be worth hundreds of dollars.
Pricing is relative. Relative to your desire to sell, the type and timeliness
of bidder inquiries (individual or corporate) and how well the sale price is
negotiated. Don`t try to fit your domain name into some `proprietary pricing
model`. Every domain name is applicable to a different target market.
Determine who your potential buyers are before determining your asking price
so you don`t over or under estimate that price. Most names (~85%) sell for
between 15%-40% of the asking price. Exceptions to this trend:
Fantastic names - Truly great names can command what a seller requests, unless
that amount is unreasonable.
High asking prices - Names that have ridiculous or greedy asking prices rarely
sell. Important!
Poor names - Names littered with hyphens, adult names, "4"s for the number
"four", "2"s for the number "two", "U"s for the word "you", etc. Don`t waste
your time listing names like these. They rarely sell.
How Do I Determine My Site’s Worth?
Selling virtual real estate is a lot like selling physical real estate. Just
like with the housing market, website “homes” (also known as
domain names) can be purchased for a low cost, remodeled and decorated to
look very attractive to potential buyers, and sold for a considerable profit.
To understand how this works, first consider that you were in fact selling an
actual house built on land instead of an abstract entity on the web. It would
be impossible to price your home without doing extensive research to
determine its worth. You’d need to take many factors into
consideration, such as: size, landscape, curb appeal, the value of other
properties in the area, the current buying market, and – perhaps the
biggest factor – location, location, location! You’d never dream
of arbitrarily assigning a sale price to your home without having some idea
of its worth and what buyers might be willing to pay. If you underprice your
home, you could be missing out on a substantial profit opportunity. However,
if you overprice your home, you might not be able to sell it at all.
That’s why it’s so important to have all the facts before putting
your home on the market – and the same holds true for selling your
virtual home on the web.
When determining your site’s value, you may need to do some research
online. It is often a good idea to compare different websites on the Internet
and to see which sites catch your eye. You can make a mental note of the
methods used on websites that were appealing to you; then you can use those
ideas when creating or updating your own website. The design of a website is
very important when you are trying to sell an existing site online. The
design should be bold and colorful, but should not be too busy. You may want
to use colors that relate to the theme of the site as well. For instance, if
you are selling bottled water, it would be logical to use shades of blue on
your website. However, no matter how brilliant the website design is, the
purpose of the site must also be useful for the website to sell. A good
website will revolve around an interesting idea or useful type of business.
To reflect the purpose of your website, you should include clear, informative
content that is easy to understand. A website with a clear and interesting
purpose is very likely to sell on the Internet.
What Makes a Site Valuable to Buyers?
These days most websites are valued by the number of visitors they attract.
One common yard stick is your domain name is valued at $10 to $30 per hit per
day. If 1,000 people land on your front page each day, your domain could be
worth $10,000 to $30,000. Another optimistic way of looking at domain values
is each unique visitor you get over the course of a month is worth $250. If
the visitor clicks to a second page on your site, her presence is worth $500.
By this measure, a site getting only 10 hits per day could go for $15,000.
This strategy is a lot like the way traditional businesses have always been
sold. The more customers a store has, the more it is worth to a buyer. That
is a pretty solid way to value domains. It is a model that is likely to be
around for a long time to come.
Here are some of the main questions a typical buyer will ask him or herself
when considering whether or not a website is worth purchasing – and at
what price:
Is the site making any money? Is there proof?
What is the potential for future profits?
Does the site have traffic? Is there proof?
Is the site attractive/well designed? Is it functional and user friendly?
When was the domain name registered?
How is the site ranked with the major search engines?
What does is take to maintain the site? i.e. hosting fees, content addition,
promotion, etc.
Why does the owner want to sell the website?
If you’ve purchased a unique domain name with a great deal of potential
value, it may not be necessary for you to have an existing website in order
for you to sell your domain name for a profit. Typically, domain names will
sell based on its performance in four key categories: Commercial Development
Potential – The ability of your domain name to be used as a brand,
redirect, campaign address, etc. Recognition – The relevance of your
name to the market and how easy it is to remember. Length – In most
cases, shorter is better. However, a longer more obvious name can sometimes
be more valuable than a short classified-ad contraction style domain.
Extension Value – This refers to the .COM part of your domain name.
Currently .COM names still command the highest values followed by .NET, some
national domains (such as .UK) and .ORG names.
How Can I Guarantee I’ve Priced My Site Correctly?
Unless you are a true domain name expert, we strongly recommend having your
site professionally appraised. In fact, this is probably one of the most
important steps you can take towards ensuring a successful sale of your site.
Appraisers are professionals and experts in their field, and they have the
means and methods to conclude what your domain name is worth. As we mentioned
earlier, if you place an exaggerated price on your name, potential buyers
will be scared away from making a reasonable offer. If you undervalue your
name, you may end up kicking yourself when your newly sold name rakes in
millions – for someone else. Furthermore, an appraisal is a very handy
thing to have when buyers want “proof” that your name is as
special as you claim. In the end, it is an exceptionally valuable asset,
available for a very small price.
For information on UK Website for Sale’s professional appraisal
services, visit: http://www.ukwebsiteforsale.co.uk/appraisal/ (http://www.
ukwebsiteforsale.co.uk/appraisal/). We offer a 20+ page Website Appraisal
that can dramatically increase the value of your website. No one on the
Internet offers a more complete or cost effective Website Appraisal, and
certainly no one offers all the extras we do that are included for FREE!
Step 2 - Prepare your Business Information for the Sale
After you have decided to sell your business for whatever reason and chosen an
asking price that you can support (hopefully with some advice from research
or, even better, through a professional appraisal service), you are now ready
to talk to some potential buyers. Or are you?
Much like the asking price, the art of preparing your business for sale is not
that easy. So, what do you need to successfully prepare the business and
information? The list and needs vary greatly over business types, revenue
sizes, verticals, and so on. For any business, the basic requirements for
what you will need are quite similar. At the very least, you should have the
following items: Business Summary -- what it is and why you are selling
Business Plan/Marketing Plan -- if you have them Asset List -- both
tangible and intangible Search Engine Rankings Website Traffic Reports Any
Technical details Financials (previous years and Current YTD financials)
Most recent completed year`s Profit & Loss or Income Statement report and
Balance Sheet -- if you have it Sales Forecasts Supporting documents for the
Financials -- Tax, Bank, and/or Merchant Statements
The previous items will give all potential buyers a good idea what is for sale
and probably a good idea if they are interested in pursuing the sale or not.
However, that is usually just the beginning, so be prepared for many, many,
many more questions.
Also, please keep in mind that your materials, presentation, and responses
will be graded as part of the business in a way. Why? Because, how can your
business be successful if you are unorganized, not well presented, and not
able to respond quickly and concisely? This is what the buyer will be
thinking. And in my experience, this is pretty accurate.
Step 3 – Market Your Website/Domain Name
There are various methods of putting your domain name up for sale. Decide
whether you would like to sell your domain by owner or simplify the process
and significantly increase your chances of receiving the best offer in the
shortest amount of time by listing your domain name with a third party, such
as http://www.ukwebsiteforsale.co.uk (http://www.ukwebsiteforsale.co.uk).
What if I Want to Market My Site On My Own?
There are 101 different ways to promote your domain name. One way we don`t
recommend is blanketing companies with unsolicited email. Writing mail to 200
banks asking if they want to buy FasterInternetBanking.com (http://
FasterInternetBanking.com) is not likely to win you many friends, nor make
you any deals. Your time would be better employed using the methods listed
below:
a) Update the domain name registration information
Many potential buyers will look at the information in the WHOIS database as a
first step when investigating a name that they are considering buying. So
make it perfectly clear that the name is for sale. Update the owner`s name to
include (This name is for sale) after your own name. Make sure all your
contact information is current and accurate. Contact your domain name
registrar to update your WHOIS listing.
b) Put a promotional website up
The other obvious way for a potential buyer to find out if a domain name is
for sale is to visit the website. Don`t disappoint them. If you don’t
have an existing website, get some web space from a decent host provider and
put a simple, one-page site up, showing that the name is for sale. Include a
form or at least an email address so that interested parties can submit
offers.
c) Get the Word Out
There are two different types of e-marketing strategies that may help increase
your sales.
Direct Marketing: Identify and Address Your Audience. What types of businesses
or individuals would be interested in your name? When you have identified
your specific audience, you can take the next steps:
1. Visit newsgroups related to domain names and the nature of your name for
sale. Post messages and begin discussions.
2. Subscribe to ezines related to the topic and find out where these people
are on the web, and how you can contact them.
3. Once you have contacts, you can send out emails to potential customers.
Mass Marketing: Address Many. As opposed to direct marketing, mass marketing
targets a large amount of people, hoping for a small response. Some ways to
do this are:
4. Participate in domain forums, ask questions and seek out domain resellers
or people who may be able to offer you more tips.
5. Use search engines. Although search engines differ in their methods of
operation and website submission, you can often submit your site for no cost.
To find out more information about different search engines and how they
work, visit http://searchenginewatch.com/ (http://searchenginewatch.com/).
What are the Benefits to Registering My Site With a Third Party?
For a small fee, you can list your site with a reputable third party, such as
http://www.ukwebsiteforsale.co.uk (http://www.ukwebsiteforsale.co.uk), and
greatly enhance your site’s exposure to qualified buyers and ultimate
profit potential. Among the many benefits you’ll receive by registering
with ukwebsiteforsale are: High visibility – Reach 1000s of qualified
buyers every month FREE 3-Month Featured Listing with purchase of
professional appraisal Professionally written ads FREE email newsletter A
professional appraisal to accurately determine your sites worth and increase
your chances of selling – ready in three to five business days The
security of working with a trusted, experienced and highly recommended
company The opportunity to connect with a recommended site broker, who will
further simplify the process by handling payment, escrow, and domain and
registrar transfer.
Visit http://www.ukwebsiteforsale.co.uk/exchange/sell-a-website.htm (http://
www.ukwebsiteforsale.co.uk/exchange/sell-a-website.htm) to learn more.
Step #4 - Make The Deal
You could get lucky, and receive an offer just days after listing your name.
Typically, though, names are listed for months before any offers arrive. The
key here is to be patient. Think about it - a party needs to come along who
believes that the name is right, even essential, for their new Web site. The
only other offers you will get will be from domain resellers, who will
typically offer you 20-25% of a name`s potential value. Unless you really
need the money, turn down these offers, but note them anyway, as they are
external confirmation that your name has resale value.
Once you have agreed a deal with the buyer, then you will have to complete the
deal. They send you payment, and you transfer the name to them. It`s best to
use an escrow service here. It protects both parties, but adds to the cost,
so make sure you have agreed beforehand who will pay for it. Normally the
buyer pays, but sometimes the cost is shared. Please note: to sell a domain
name by owner, through a private transaction rather than a trusted third
party, is risky business unless you completely trust the buyer.
There will be some wait time as money switches hands and the domain name
ownership is transferred. Unless you are selling your domain to your mother
or selling it for a very low price, we recommend using an escrow service to
take care of the money transaction.
Good luck!
Manny Avedissian, President - UKWebsiteForSale.co.uk (http://UKWebsiteForSale.
co.uk)
Copyright 2004 - UKWebsiteForSale.co.uk (http://UKWebsiteForSale.co.uk)
Copyright 2001, SmallBiz Publishing.
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